CURRENT FOCUS

The road to prosperity is through saving capitalism from capitalists, argue economists Rajan and Zingales.1 Perhaps nothing represents the distortion of capitalism better than the global drug industry which flourishes on privileges of power such as secrecy, lack of transparency, rule-bending and denial of knowledge to others. Ironically, all this happens in the name of fair play while grave injustice is done to the poor patients who cannot afford life-saving medicines.

“The corrupt version of capitalism…generates economic inefficiencies and social injustice, thereby undermining political support for the free-market-based system…”2 the authors suggest about what will work for human society. The governments, they recommend, need to fix the rules of the game through the “right dose of regulation and alleviation of social costs.” The drug business proves the point by leveraging its dominance at the expense of public interest at a time when health policies are already skewed in favour of the expensive drugs and big private hospitals

The debate takes us to what kind of relationship we want between science and democracy. For instance, democracy deepens when the fruits of modern science reach the last person but then scientific research thrives in an ecosystem which provides a reasonable return on investment. It is on this principle that the global Intellectual Property (IP) regime protects IP-rich industries like the entertainment, ICT, software or pharmaceuticals. Consequently, multilateral agreements under WTO and TRIPS make IP central to the world economy. Even the judiciary is unable to intervene as the new agreements tend to be beyond domestic laws.

According to Doctors Without Borders (or the MSF in French), such agreements follow one-size-fits-all-approach and make healthcare prohibitive for the world's poor. They also severely limit provisions like the use of Compulsory Licenses (CL) which some developing countries use to make unaffordable medicines available to their citizens.3 But in the end, questions like whether a person would live or die become a matter of her country's capacity for negotiations with global fat cats and their glib advocates. India's production of generic medicines is already affected adversely by harmful provisions included in recent trade negotiations between India and EU.

The MSF was given Nobel Peace Prize as a recognition for its work on affordable healthcare for the poorest across the world. In his Nobel acceptance speech, the organisation's President, Dr James Orbinski, put the issue in perspective:

“More than 90% of all death and suffering from infectious diseases occurs in the developing world. Some of the reasons that people die from diseases like AIDS, TB, sleeping sickness and other tropical diseases are that lifesaving essential medicines are either too expensive, or not available because they are not seen as financially viable, or because there is virtually no new research and development for priority tropical diseases…It is also for governments, International Government Institutions, the Pharmaceutical Industry and other NGOs to confront this injustice. What we... demand is change, not charity…”4

Obviously, India is not alone in this battle. But our challenges are enormous since a large segment of our population is extremely poor and vulnerable. Even those who are relatively well off can fall below the poverty line due to a single medical emergency. Expenditure on health care is rural India's second most important cause of indebtedness, according to a Parliamentary Standing Committee Report on Health and Family Planning. The expenditure on medicines constitutes anything between 40 and 80 per cent of the total cost of treatment, the report notes.

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The committee also notes that use of the generic drugs, which are substantially cheaper than branded products, need to be promoted both in the public and private sectors to reduce the prices and availability of drugs. It applauds the efforts of the IAS officer Dr Samit Sharma who, as Collector of Chittorgarh district of Rajasthan, transformed the health services by making cheaper, generic drugs available and for building awareness among the people. He has shown that an alternative system is possible. Similar experiments have also worked in many other states.

However, a particularly weak link is the doctors who avoid prescribing generics because of a deep-seated belief that these are inferior in quality. The assumption is that the manufacturers of generic drugs don't follow the same, stringent procedures as their branded counterparts. However, agencies like the Food and Drug Administration (FDA) in the US mandate rigorous tests to prove that the generic drugs are equivalent to the name-brand originals. Incidentally, the Indian pharma companies are among the biggest suppliers of generic drugs in the US.

It is obvious that the doctors' fears can be dispelled by benchmarking the best manufacturing practices and quality control. However, it is shocking that the branded medicines produced by multinationals, which are known to splash big money on brand-building and promotion through incentives to doctors, are also found to be lacking in quality. A recent report of a study on sub-standard and spurious drugs conducted by the National Institute for Biologicals for the National Drugs Standards Control Organisation found many branded medicines to be sub-standard.5

Of late, the Medical Council of India has issued new guidelines to doctors after the Prime Minster Narendra Modi said that the government was considering a legal framework for prescribing generic drugs. The All India Drug Action Network (AIDAN), which works on rational and people-oriented drug policies, has been quoted as saying that things are unlikely to change without phasing out all branded drugs except the patented ones. The government has also announced setting up of 3000 Jan Aushadhi stores by the end of 2017 for dispensing cheaper drugs but that is not even half a per cent of the country's total number of chemists estimated to be around 9 lakh.

It is no brainer that the government spending on health-care needs to increase to at least 3 per cent of the GDP. However, the need is to not only to spend more money but also to change the way the money is spent and create innovative institutional mechanisms for delivery of low-cost medicines and health services.

This issue of Common Cause journal discusses the availability and accessibility of low cost medicines for all. The idea is that medicines should not be a luxury and the society and the state must step in if the life-saving medicines cost several times a citizen's earning capacity.

RajanRaghuram G and Zingales L (2003) Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets toCreate Wealth and Spread Opportunity